When we say trends in e-commerce are on a dizzying high, we mean all trends. With higher sophistication in technology comes more pathways and new avenues to perform fraud. E-Commerce businesses are now innovating more methods than ever to stay wary of fraud and deliver unparalleled customer experience.
As 2020 sets in, Thirdwatch helps you understand some of the top trends predicted for the e-commerce fraud industry. If you’re running an online shop, it is best advised to fool-proof your business with a fraud prevention system set in place.
So, here goes, here are some e-commerce fraud trends we’re expecting to change the face of the industry in 2020!
Everything is digital now
We don’t have to brief you about the complete digitization that’s taking over the market. Organizations are highly invested in providing top-notch customer service and are willing to spend money in order to do that digitally. This will, of course, provide fresh ways to perform fraud.
Some of the channels that criminals will resort to are omnichannel fraud, BOPIS fraud, mobile banking account fraud, etc. Companies need to stay laser-focused to provide utmost security to customers who entrust their data on websites.
Data is the new oil and the e-commerce industry will surely be looking to leverage on this treasure. As more AI-backed engines enter the market, fraud prevention companies will be looking to safely, yet proactively use this data to make detection tools smarter, faster and more accurate than ever.
With more complex solutions, we can also expect a significant decline in the number of false positives and other inaccuracies.
Tailor-made solutions are in
As more anti-fraud solutions look to enter the market, the biggest takeaway is that one solution doesn’t fit all sizes. While an enterprise business will be looking for more customizations and parameter evaluations that fit their brand, smaller companies will be looking for tailor-made solutions that fit their budget.
In any case, it’s clear that 2020 would prove to be a crucial year in terms of the problem statement awareness. We can expect companies to invest more time and money in finding the right fraud prevention solution.
A bigger market for fraud
As the awareness about e-commerce fraud increases, we can expect more fraud prevention solutions to flow in. Razorpay Thirdwatch still continues to dominate the Indian market with unique offerings that can be customized to fit the size of your online store. Check out how we do that here.
We can also expect a clear expansion of the AI-based fraud detection market with more AI and ML-backed tools. Fraud prevention companies will be looking to grow out of standard fraud prevention and will innovate new services to optimize customer experience.
A swarm of data breaches
One of the most shocking online scandals of our generation is the Facebook-Cambridge Analytica data breach. Since then, there has been no dearth in the number of data breaches all around the world.
E-commerce merchants need to be especially wary of this situation as they possess an enormously large amount of sensitive data. Criminals will be looking to take full advantage of these data breaches and will use that for identity theft-related fraud.
Consortium and collaborative data
It’s no surprise that the internet stretches until the end of the horizon, if not longer. It only makes sense that no single entity will control or know the entire functionings of the internet.
Risk departments across large organizations work by a rule-based framework. However, its effectiveness is achieved only by agility and constant evolution of the rules. More collaborations suggest more information on how to effectively process customer data. In the coming year, we can expect solutions to team up to create a consortium of sorts- a heap of shared information from across networks.
This can be connected to how Thirdwatch analyzes network effects and identifies criminals across platforms.
New ways to perform fraud
As we specified earlier, the rise of technology is going to inadvertently bring new avenues to perform fraud. Companies need to adopt new technologies to battle fraud in real-time.
Some of the roads that fraud is expected to take are AI-enabled account takeovers, synthetic identity fraud, vendor and payroll fraud, insider fraud, etc.
AI-enabled account takeovers: This can happen as criminals launch an army of bots generated from data leaks and breaches all over the world. This can lead to many cases of identity theft. Furthermore, the leaked data from systems can be further enriched via ‘intelligent’ bots who resort to social engineering.
Synthetic identity fraud: The newest way used by criminals to defraud merchants and banks is synthetic identity fraud. In this, the fake accounts predominantly carry real information such as PAN card, credit card information, home address, etc. This makes it more challenging for companies to figure out whether the account is genuine or not.
Vendor and payroll fraud: One of the least-addressed frauds in the industry is corporate vendor and payroll fraud. Criminals study their victims well before the attack, learning about the financial patterns of the latter. This type of fraud is usually preceded by a significant spike in fake emails sent to a company’s HR or finance team.
Insider fraud: Time and again, criminals have resorted to infiltrating disgruntled employees to extract valuable information. Fraudsters attempt to take advantage of employees’ negligence and seek to get financial and identity trade secrets. This type of fraud is well-thought-out and sometimes involves years of planning. It’s important to run a tight ship to retain your sensitive data safely.
That sums up some of the trends we’re expecting in the e-commerce fraud industry in 2020. In conclusion, it’s important for e-commerce businesses to re-invent their security management for safety. Any e-commerce business can choose to opt for custom-made, easy-to-use solutions such as Razorpay Thirdwatch to help detect fraud in real-time.
Install Razorpay Thirdwatch today and streamline your business like never before!